FX.co ★ Technical Analysis of EUR/USD for February 9, 2024

EUR/USD Still Under Bearish Pressure

Key Takeaways:

• EUR/USD encounters resistance, with potential for bullish reversal or continuation of bearish trend.
• Global events influence market sentiment, including geopolitical tensions and central bank insights.
• Technical indicators present a mixed outlook, signaling caution for traders.

Market Brief: Global Events Shape Forex Landscape

Today's Asian trading session witnessed limited volatility across APAC markets, attributed to Lunar New Year celebrations. Despite suspended trading in China, slight upticks were noted in Australia, Japan, and Korea. European futures hinted at a stable start, with attention focused on CPI data from Germany, Canadian labor market insights, and ECB's Nagel's address.

Central Banks' Stance and Global Politics

RBA's Governor Bullock highlighted ongoing inflation concerns, suggesting potential rate cuts if consumption declines. Conversely, further hikes could be on the table if needed. The US is contemplating Chinese EV import restrictions, while Russia's stance on Ukraine and Poland adds to geopolitical complexities. Japan's monetary policy remains accommodating, according to BOJ Governor Ueda, signaling an interest rate environment conducive to growth.

Currency and Crypto Movements

The New Zealand dollar emerged as a frontrunner, buoyed by anticipated RBNZ rate hikes. Cryptocurrencies saw an uptick, with Bitcoin surpassing the USD 46,000 mark, reflecting increased investor interest.

Technical Outlook: EUR/USD Analysis

The EUR/USD pair's recovery is capped at 1.0789, near the 38% Fibonacci retracement. Resistance at 1.0768 and 1.0781 suggests a challenging path for bulls, with support at 1.0755. The currency pair's momentum, lifted from oversold conditions, now tests a pivotal point. Candlestick patterns, such as Hammers and Bearish Engulfings, hint at market sentiment shifts. The price's position below the EMA 100 suggests short-term bearishness, whereas the DEMA offers immediate support. RSI levels indicate a balanced market momentum.

Intraday Indicators and Sentiment

- 13 out of 22 technical indicators are showing Buy signal, 2 is showing Sell signal and 7 is Neutral

- 15 out of 18 moving averages are showing Buy signal, 3 are showing Sell signal

The general sentiment on the scoreboard is bullish (56% vs.44% bears). Last week sentiment remains bullish as well (55%bulls vs.45% bears) while the last three days sentiment is neutral (56% bulls vs.44% bears).

Trading Insights:

EUR/USD Bullish Scenario: A sustained move above the DEMA, supported by positive RSI trends, could signal growing bullish momentum. Overcoming the EMA 100 with volume would bolster this outlook, potentially targeting higher resistance levels.

EUR/USD Bearish Scenario: A break below the DEMA, coupled with a declining RSI, might confirm bearish momentum continuation. Further bearish patterns could see the pair testing lower supports, indicating a potential downtrend initiation.

Conclusion: A Balanced Approach

The EUR/USD pair stands at a crossroads, influenced by global events, central bank policies, and technical indicators. Traders are advised to monitor for bullish or bearish confirmations, applying prudent risk management and considering broader economic factors impacting the forex market.

Useful Links

• More Artcles
• InstaForex Course for Beginners
• Open Trading Account

Important Notice

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

#instaforex #analysis #sebastianseliga